Some of you already know this, but for the last year, I've been hiding a secret. 2012 was a really difficult year for me. I thought after 7 years of hit and miss contracting, I had a stable and long term job. I had been working on a home renovation for a couple years, replacing my 30yr old doors and windows, living behind plastic curtains while my master bath was gutted, finding holes in my uninsulated floor, having my living room jacked up 3" because the outside posts had settled. It's cost me an arm and a leg - I've actually spent more on the remodel than I did on the original purchase nearly 20 years ago - and I finally got to the point where if I wanted to finish it, I was going to have to take advantage of some zero-percent financing deals.

So paint on the walls - 12 months financing. Sofa and love seat? 18 months financing. Finally replacing my 19 yr old mattress with a Sleep Number bed? 24mo financing. The good news is I had the credit to get these purchases approved. The bad news is my employment was not as secure as I thought it was. I fell behind on my payments, had to deplete what was left of my eFund, and eventually was able to save my house but not save my credit and had to declare bankruptcy. After 13 years of counseling others on the Credit Cards/Consumer Credit discussion board, I had become a victim of my own self-confidence.

But a funny thing happened along the way, and it happened so quickly, I was kind of swept away by the experience. As most of you know, I have made my bones offering common sense solutions in responding to posts and questions. I'm not a financial or investment expert - I'm computer science by education and information technology by trade. I couldn't read a balance sheet to save my life, but after a decade in the world of business intelligence, I know how to learn how a business works pretty quickly. So when this opportunity came along as I was working through disappointing my creditors, I realized it was something I could do, and I could do well.

Please don't hate me, but I have become a debt collector, specializing in working with a law firm that targets debt in the throes of bankruptcy before they are discharged.

I almost didn’t want to post this today lest it be taken for an April Fool’s Joke, but for real, this has turned out to be a kick-arse job! I have been able to take everything I have learned from my business clients, from my own experience and from The Motley Fool to become a specialist in getting debts to my clients paid before the debtors complete the bankruptcy process.

What happened is that a guy threatening to sue me for past due bills said he was a lawyer and wanted to make me an offer I couldn’t refuse. Now, I didn’t check out his law license, but he said he had passed the bar. I just didn’t ask him if it was happy hour at the time. He said he thought given my education and skills and ability to fake empathy, I would be perfect for this idea he had of going after debts before they are dead. And it turns out I am good at it. Six figure salary good.

First and foremost in my arsenal is guilt, and being Jewish, the guilt trip comes naturally to me. Don’t you want to honor your commitments? What would your father think of your welching on your debts? What would your mother think? Do you really want to take money out of the mouths of minorities who won’t receive microloan funding for their low income businesses because you stole money from your bank? Or doctor? Or failed to pay your taxes?

Another great weapon is the rule of math. If you look at debt as one large amount, it’s daunting, but if you break it up into individual components, it becomes easier to convince debtors that they can pay up after all. A $5000 credit card debt is intimidating but can be reduced to 500 Super Grande Mocha Lattes, and wouldn’t you be willing to give up just 10 visits to Starbucks for the next 50 months and be done with the debt in just 2 years? Amazingly, when broken down like that, people are much more willing to pay.

Alternately, you can identify the original individual charges on the credit card or hospital statement to package payment deals. If you bundle the pedicure with the dry cleaners with the 3D Blu-ray copy of The Hobbit, you can establish a sense of accomplishment and ownership that your payment covered something identifiable, rather than just a small pebble on a huge mountain of debt. This method works great when you have lots of little charges – there is a psychological pay-off in being able to remove dozens of unpaid items from your list in one swell foop.

I have also learned to take the lessons from debt consolidation agencies, but to legitimize the process. I’ll contact the creditors on the debtor’s behalf and negotiate a settlement. Of course, the debtor pays me a small percentage for this service but the creditor pays me a much larger percentage for the amount I can get back for them in lieu of having to go to court. The more debts I can wrap into one consolidation proposal, the bigger the cut I take Of course, the debt can’t have been passed on to a collector already – those guys are scum!

I always start my debtors with a fresh spring cleaning. You never know how much loose change you can find under the bed, between the sofa cushions, hidden in children’s’ rooms or the spouses’ secret petty cash stash. I also offer my services as a forensic accountant. Once you plant the seed of doubt that the reason they don’t have the money to pay off the debt is because the spouse has been hiding it away in preparation for a divorce, it’s easy to get permission to dive into the household accounts looking for every penny I can get.

Another approach I take is to hit up friends and family for money to help pay off the debt. I explain to the debtor how the scams work where someone gets an email or FB post that a loved one is stranded in a foreign country and they need to have emergency money wired to them right away. It works best with elderly relatives like grandparents. I send them to a web site where they can download templates to use but which can’t be retraced back to me. You would be amazed how often this works. Sure the debtor feels guilty but at this point, they’ll do anything to get me off their back.

Kill ‘em with kindness, my mother always said, so I never talk to these deadbeats nasty-like or threaten their children or dogs with repossession. I never warn them that Social Services will take their kids away because they can’t afford to be a good parent, or that the PETA has their name and number as a pet abuser. That would be unethical. But I do mention I have heard stories of such things. Not that I know they’re true, mind you, but if you plant a seed of fear, it can grow into complete debt-paying paranoia.

Now, the BK lawyers are not too happy about this. They’ve had a good thing going with all the bankruptcies they’ve been able to bank profits on. And they’ve threatened to come after me for stealing their clients out from under them, but I don’t care. First, my lawyer friend has a secretary named Bruiser and has given me a pet Doberman to keep as protection. Second, both the debtors and creditors win, so they both love me and recommend me to their friends and competitors. As I said, win-win!

I am thinking of franchising this brand new business model, so if anyone is interested, please let me know. But for now, I’ve got this racket all to myself. Plus the 40% I pay to the lawyer for the protection.

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